What is the APR? Why is it different from the interest rate?
As indicated on your truth in lending disclosure, the APR, or annual percentage rate, is quite often slightly higher than the actual note rate, or the actual quoted interest rate. There are two rates on the truth in lending disclosure which is also known as the “T I L” pronounced till. The rate in the upper right hand corner is the note, or the rate that you were quoted. The rate in the upper left hand corner is the APR, or the annual percentage rate. The APR is different than your note rate because the APR includes additional costs of obtaining your financing. Simply stated, if there were no costs in obtaining your financing, your note rate and APR would be the same.
